Original Medicare Covers 80% of Your Doctor Bills. The Other 20% Has No Ceiling

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A 67-year-old retiree on Original Medicare gets a stage III colon cancer diagnosis in March. Surgery, chemotherapy, imaging, and specialist visits generate roughly $200,000 in Medicare-approved Part B charges over nine months. After the deductible, Medicare generally pays 80% of covered Part B costs and the beneficiary is responsible for the remaining 20%. Without supplemental coverage, that share could approach $40,000.

That uncapped 20% is the single most consequential feature of Original Medicare, and why almost no one stays on Original Medicare alone.

The 80/20 Math, and What It Actually Costs

After a beneficiary meets the 2026 Part B annual deductible of $283, Medicare pays 80% of the approved amount for physician services, outpatient hospital care, durable medical equipment, chemotherapy infusions, and most other Part B services. The patient owes the other 20%. There is no annual out-of-pocket maximum on that 20%. Employer plans cap it. Medicare Advantage caps it. Original Medicare does not.

In a quiet year, this is negligible. A retiree with two physicals, a flu shot, and a screening colonoscopy might see total Part B charges under $1,500. Her 20% is around $250. If your annual Part B utilization is light and you have liquid savings to cover an unlucky year, the uncapped exposure is theoretical.

The catastrophic year is where the math turns. Twenty percent of a $50,000 treatment course is $10,000. Twenty percent of $200,000 in approved charges is $40,000. Twenty percent of a $500,000 multi-year cancer or cardiac course is $100,000. Those examples illustrate the absence of an out-of-pocket maximum under Original Medicare. Actual costs depend on how services are billed under Part A versus Part B, whether the care is Medicare-approved, and whether the beneficiary has supplemental coverage. The standard 2026 Part B premium, Part A hospital deductible, and other Medicare cost-sharing obligations still apply.

The 2026 Social Security COLA of 2.8% does not move the needle against a $40,000 bill. Neither does a household budget already absorbing average annual expenditures of $78,535 in 2024. Uncapped is uncapped.

The Two Realistic Fixes

Two structures put a ceiling on the 20%.

Medigap Plan G. Plan G covers essentially all of the Part B 20% coinsurance, Part A hospital coinsurance, skilled nursing coinsurance, and the first three pints of blood, after the beneficiary pays the $283 Part B deductible once for the year. The 67-year-old above, with Plan G in force, would owe the $283, her Part B premium, and her Plan G premium. Her exposure is capped at those fixed costs. Plan G premiums for a 65-year-old in 2026 run roughly $150 to $250 a month depending on state, insurer, and underwriting class, with the national average closer to the middle of that range. At $220 a month, the annual cost is about $2,640. That converts an open-ended liability into a fixed line item.

Medicare Advantage. An MA plan replaces Original Medicare with a private network plan that must, by federal rule, cap in-network spending. The 2026 federal in-network out-of-pocket maximum is $9,250, and the combined in- and out-of-network maximum is $13,900. Many plans set lower in-network limits. The premium is often $0. The tradeoffs are real: narrow networks, prior authorization on chemotherapy and imaging, and the fact that the in-network cap excludes Part D drug spending. Depending on the plan design, out-of-network services may be subject to separate limits, limited coverage, or no coverage at all. Worst-case exposure can include the plan’s out-of-pocket maximum, Part D drug costs, and expenses associated with non-covered, denied, or out-of-network services.

The Switch-Back Trap

Choosing Medicare Advantage at 65 looks reversible on paper, but in practical terms the decision tends to lock in. Moving from MA back to Original Medicare later means applying for Medigap under medical underwriting in most states. An insurer can rate the application up or deny it outright for a pre-existing condition. The window when a Medigap insurer must accept any applicant at standard rates is the six months after Part B first takes effect. After that, in most states, the door is conditional.

That makes the decision at 65 closer to permanent than it looks on the brochure.

What To Do

• If you are inside the six-month Medigap open enrollment window (the six months starting the month your Part B coverage begins at age 65 or later), price Plan G and Plan N from at least three insurers in your ZIP code before the window closes. After it closes, guaranteed issue is gone in most states.
• If you are leaning toward Medicare Advantage for the $0 premium, confirm your oncologist, cardiologist, and preferred hospital are in-network, and read the prior authorization rules for cancer drugs and imaging before enrolling.
• If you are already on Original Medicare with no supplement and no MA plan, you are carrying the uncapped 20% personally. Get a Medigap quote this month, even if underwriting applies. The premium is knowable. The catastrophic year is open-ended.

Source note: 2026 Medicare Part A and Part B premiums, deductibles, and coinsurance figures are from the CMS fact sheet on 2026 Medicare Parts A & B Premiums and Deductibles. The 2026 Medicare Advantage in-network out-of-pocket maximum is the federal cap set by CMS. Medigap premium ranges vary by state, age, insurer, and underwriting and are illustrative.

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